All eyes on the man who stepped into Iraqi inferno

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Mission accomplished ... Condoleezza Rice's note to George Bush shortly after the handover, and his written comment.

Pity Iyad Allawi. To win acceptance as Iraq's new prime minister he must succeed where American military might has failed, where US economic power and technical know-how are struggling. The nation of people that sends men to the moon has deferred to one that can't confidently flick a light switch.

To set out his Everest of problems is too daunting - but if he cannot impose security he too will fail.

Under the noses of 150,000 US-led troops who came armed to the teeth and who assumed absolute authority for themselves, the insurgency has become more brutal, bolder and bloodier. Yet, if Allawi does not dispatch them, there will be no reconstruction and no oil revenue. No elections and no democracy.

And for Allawi there will be no honeymoon. Early yesterday the insurgents let it be known they were still out there when a series of powerful explosions rolled across an eerily moonlit Baghdad and Al-Jazeera aired part of an insurgency video that it said showed the execution of a US marine missing since April.

Iraqis frequently insist that they need to be run by a "strongman" - often defined as a "Saddam with justice" - and that is how Allawi has been positioning himself.

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He has the legitimacy of a unanimous United Nations Security Council resolution and there is a bulging US chequebook on the table to sustain him. Leaders in the Arab world and other governments that opposed the US invasion have supported him.

But in the end it's up to the people of Iraq, and the insurgency - which is likely to divide more clearly into a nationalist Iraqi arm that will fight to rid the country of foreign troops and a more determined al-Qaeda-associated wing that will fight to keep the Americans in Iraq as a full-time shooting gallery for the Islamic jihad.

But Allawi's strengths are his weaknesses. He is a former senior Baathist - that causes anxiety for some of the majority Shiites; he is an exile of 30-plus years - questions all round about how Iraqi he really is; he has had a longstanding relationship with British intelligence and the CIA - more doubts about his allegiances; and he is a Shiite but secular - more ambivalence for Shiite conservatives.

For all that, he is a Shiite whom Saddam Hussein's old support base, the Sunnis, is more likely to accept - if only because much of what troubles the Shiites will make him more acceptable to the Sunnis. The art of the deal will be in winning a Sunni embrace before the Shiites spurn him.

As a member of the first US-appointed Iraqi administration, Allawi kept a low profile - focusing on security issues and calculatedly using the funds of his Iraqi National Accord organisation to pay lobbyists to dress up his image in Washington.

Recent polls in Iraq have given him single-digit recognition, but when it came to selecting an interim prime minister he was the consensus choice for the outgoing Iraqi Governing Council.

Accounts of Allawi's days as a Baath party member are wildly varied - but they all end with the same gut-wrenching tale.

As told by colleagues and friends, he was a great believer in the party's philosophy of Arab unity. The word "ruthless" creeps into these accounts, but so too does "consensus". As Allawi tells it, he became disheartened as Saddam began his move for control in the late 1960s and he fled the country to study medicine in Britain - while at the same time he worked for British and US intelligence services against Saddam.

But in The New Yorker last week Seymour Hersh suggested that this was a cover - Allawi went to London as Saddam's man. He quotes a former CIA agent: "Allawi helped Saddam get to power. He was a very effective operator and a true believer. Two facts stand out: one, he likes to think of himself as a man of ideas; and two, his strongest virtue is that he's a thug."

Hersh quotes another former CIA man, Vincent Cannistraro: "If you're asking me if Allawi has blood on his hands from his days in London, the answer is yes, he does. He was a paid Mukhabarat agent for the Iraqis, and he was involved in dirty stuff."

Wherever the truth lies, an accepted part of his story is that when an axeman entered his London home one night in 1978 - and inflicted injuries that kept Allawi in hospital for a year - he was sent on the orders of Saddam.

Allawi will fight a different war to Washington's. The US refused to listen last year, when he counselled against disbanding Saddam's army, a move that sent 500,000 angry gunmen into the community and denied the country an army to fight them. He opposed the US insistence on purging the establishment of its Baathists - and their know-how.

Essentially, he wants the tools that Saddam had. Ominously, he is restructuring security and intelligence in the image of what Saddam had and his defence minister, Hazim Shaalan, caused some in Washington to blanch last week when he told Newsweek: "We'll hit these people and teach them a good lesson they won't forget ... we will cut off their hands and behead them."

Allawi is insisting on a bigger army than the US has allowed him - they sent 150,000, and are sending another 15,000, but they said he could do the job with about 40,000. By some accounts, Allawi wants about half as many again, and properly armed.

Explaining his reorganisation of the security structure set up by the US, he said: "We need to regroup, reorganise and pool our resources in a fashion which is fully understood by the Iraqi culture."

The US strategy is based on a hope that Iraqis will believe they are now in control of their country, that to persist is to pit Iraqi against Iraqi. But that means Allawi has to persuade war-weary and frightened Iraqis that the presence of 150,000 foreign troops does not constitute foreign occupation.

He is offering sticks and carrots - the threat of martial law and the offer of an amnesty for Iraqis who quit the insurgency and provide intelligence that can be used against it.

At some point Allawi is going to have a fight with Washington - if only to demonstrate to Iraqis and to his neighbours that he is not an American puppet.

The UN resolution gives the Americans ultimate control and last week the US military spokesman, Brigadier-General Mark Kimmett, warned that there would be no immediate change in the visibility of US troops.

Equally, Allawi is bound to upset Iraqis - most likely when his ill-trained and inexperienced forces are unable to deal with a crisis and the US cavalry charges in to arrest Iraqis - at a time, like now, when about 100 Iraqis die in insurgency attacks each week.

The insurgents see themselves winning at present - their effective control of Falluja was a win and the sight of the former US administrator, Paul Bremer, leaving was in their eyes a victory.

Allawi can take comfort from the decision by the Shiite rebel Moqtada al-Sadr to send his army home and declare himself a willing participant in the country's new political process.

But that move came only after Sadr used his Mahdi Army in a bloody brawl with the US that made him the second-most popular figure in the country, according to some polls.

There are a dozen other private militias that will go home but refuse to surrender their arms; or, as in the case of the Kurds in the north, they will insist on a degree of autonomy.

Allawi's most difficult task will be staying alive.

Last week, an audio recording said to be the voice of the Jordanian terrorist Abu Musab al-Zarqawi warned the prime minister and the Americans: "Indirect occupation is the most effective weapon to be used against the nation. The infidel foreigner who aims at stealing the nation, looting its riches and enslaving it, is replaced with hypocrites who wear the same skin and have the same tongue of this nation."

The US will control the money and firepower as Allawi fights his way through US edicts that remain on the statue books. He'll be pushed and pulled as he tries to make the stretch from running a small exile-based resistance group to a crumbled nation that has the resources to be an economic powerhouse.

This week the outgoing British envoy, David Richmond, gave Allawi the thumbs-up: "It's a balancing act, but I think Allawi has the judgement and the political skill to do it."

Amid predictions of worse violence, Richmond's predecessor, Sir Jeremy Greenstock, was less confident: "The worst-case scenario is an implosion of Iraqi security and society down to levels lower than the unified state .. perhaps back to the medieval picture of local baronies."